The House of Representatives has taken a firm stance against the implementation of the Central Bank of Nigeria’s (CBN) cybersecurity levy, calling for an immediate halt to its execution.
This directive comes in response to a circular issued by the apex bank, which the House believes is prone to misinterpretation by Nigerians and violates the provisions of the Cybercrime Act.
In a motion presented by Minority Leader Kingsley Chinda (PDP Rivers) on behalf of the members, the House emphasized the need for the CBN to withdraw its previous circular on the levy and issue a new one consistent with the provisions of the Cybercrime Act. Section 44(2a) of the act specifies entities such as GSM and telecom companies, internet providers, banks, financial institutions, insurance companies, and the Stock Exchange as liable for the levy, not individual Nigerians.
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The decision by the House reflects concerns that the implementation of the levy has the potential to aggravate economic hardships faced by Nigerians, particularly in light of ongoing challenges such as the increase in petroleum product prices, and the free fall of the naira resulting in sky-high inflation.
The circular from the CBN has stirred apprehension across the country, prompting calls for its immediate withdrawal.
Peter Obi, the former presidential candidate of the Labour Party has condemned the Cybersecurity Levy, describing it as ‘‘milking a dying economy.’’ In a statement issued on Wednesday, Obi decried the rate President Bola Tinubu’s government is increasing taxes, despite his assurances to address multiple taxation as a way of creating a conducive business environment.
‘‘The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation and high inflation rate,’’ he said.
Also, the Centre for the Promotion of Private Enterprise (CPPE) raised alarm over the adverse effects of the newly introduced cybersecurity levy and a barrage of other taxes imposed by various tiers of government in Nigeria.
A statement signed by Dr. Muda Yusuf, the CEO of CPPE, raised concerns regarding the detrimental impact of these levies on the capacity of businesses to stimulate economic growth.
“Businesses and the generality of citizens are yet to recover from the shocks of current reforms. Inflationary pressures have not abated, high cost of living is still a major worry, operating and production costs for businesses remain elevated, amidst weak consumer purchasing power. This is not a good time to impose an additional levy both on businesses and citizens,” he said.
Socio-Economic Rights and Accountability Project (SERAP) has condemned the policy, giving the federal government a 48-hour ultimatum to retract the 0.5% cybersecurity levy imposed on Nigerians.
The levy, directed by the CBN to be implemented effective May 20, 2024, entails a 0.5% charge on electronic transactions, with proceeds remitted to the National Cybersecurity Fund administered by the Office of the National Security Adviser (NSA), headed by former Chairman of the Economic and Financial Crimes Commission (EFCC) Nuhu Ribadu.
The CBN’s clarification indicates that the levy will be reflected in customers’ accounts as a “Cybersecurity Levy” and applied at the point of electronic transfer origination, subsequently deducted and remitted by financial institutions. Despite the CBN’s assertion that this directive aligns with previous circulars issued in 2018, criticism persists regarding its potential adverse effects on Nigerians already grappling with economic challenges.